Federal Health Exchange Current Status

May 2, 2013

It is less than 6 months before Federal health exchange is supposed to be open, but information on it is hard to find and there is no official website yet. While most of the 17 states, which have opted for state based health exchange are making good progress and have lot of information available including exchange websites (You can find state based health exchange information here), the federal health exchange is up to a slow start.

Health and Human Services is designated to run Federal health exchange, has a big task ahead to provide qualified health plans to the residents of the 33 states, which have opted for either federal health exchange to be set up or entered into a partnership with federal government where it will run the exchange’s website and provide health care plans.

The federal exchanges is running behind schedule and GAO report highlighted this, you can find more info in this latest update on federal exchange post here.

Federal Health Exchange Implementation Need Extra Money:

According to Health and Human Services (HHS), they are making progress towards establishing federal health exchange. They have recently requested congress for an extra 1.5 billion dollars to help fund the implementation of federal exchange, though it is not clear whether it will be approved. As per the president’s budget request for year 2014, this will make total spending of around 4 billion dollars to help fund the state and federal health exchanges (also called marketplaces).

But even if extra money is not received, there are other options available to draw money and HHS is expecting to spend this 1.5 billion dollars. According to Ellen Murray, HHS assistant secretary for financial resources, the extra money will come from various sources, which includes $235 million from the health reform law’s implementation fund, $450 million from a “nonrecurring expenses fund” that allows federal agencies to use money from previous years for one time real estate and information technology investments. and $116 million using HHS’s authority to transfer money between accounts. HHS will also draw on the law’s prevention fund for financing.

Health and Human Services (HHS) Department has contracted with Weber Shandwick to advertise and market newly created federal health exchange. The PR firm will use “a variety of options, with an emphasis on digital outreach and paid media” to raise awareness of the exchange.The contract is initially around for $8 million, with an option to spend more as needed.The ObamaCare law has something called “Exchange Navigator” program which is also supposed to provide community outreach and education regarding upcoming insurance exchanges and there is $54 million dollars grants available to eligible entities and community and consumer-focused nonprofit organizations.

Federal Health Exchange Received Huge Number Of Application From Insurance Companies:

According to HHS, As of April 1st, around 900 insurance companies have filed application with the health department, showing their interest to offer health plans in the federal health exchange. This clearly shows that there is huge interest from insurance providers and with a large number of participant interest, this will help provide a good competition and cost effectiveness.

Setting up the technology infrastructure is one of the most difficult parts of establishing a federal health exchange. Recent briefing from HHS elaborated on progress made on information technology front and it seems to be making good progress on establishing IT infrastructure and data hub for setting up the federal exchange. At least one state, Connecticut, is able to connect with the federal government’s data hub.